The Best Ways to Make Money in the Property Market
The property market has experienced incredible growth in the past two years, with property values having increased by 12.4% between April 2021 and April 2022. There were a number of different causes for this growth, with temporary stamp duty relief and high demand for new properties leading chiefly to a surge in sales in 2021.
Money-minded people will rightly see the property market as a strong opportunity for investment; even as growth looks to cool, demand remains high. But there are many ways to go about making money in property. Which are the most effective?
While buying undeveloped land may seem somewhat counterintuitive if you’re looking to make money in the property market, land purchasing can actually be one of the more lucrative ways to do so. It also gives you a unique degree of flexibility when it comes to long-term strategy.
Demand for new-build properties is currently high, which represents a golden opportunity for the property investor. With the right tract of land and a budget for construction, you can fund a new build construction project and find yourself in ownership of a number of sought-after properties – which you can then sell on, or let out for passive income.
If you do not have the budget or time to orchestrate as major an undertaking as this, you could pay a nominal cost to prepare the land for commercial or residential development, and then sell it on as viable land for a significant profit.
Property Development (or “House-Flipping”)
Of course, generating income in the property market does not require as concerted an effort as the above. In fact, many homeowners make money practically by accident, as a result of investing in their home through renovation and decoration. Home improvements often increase the value of a property by more than their cost – generating a profit when it comes time to sell.
Some homeowners are able to use this principle to generate a regular income, by engaging in property development – or house flipping. Typically, the biggest money-makers when it comes to property development are extensions, in particular those that create more bedrooms. The costs incurred include materials, labour and building work insurance, so each property to be developed does need an allocated budget; the gains can be significant, though.
Always Have Your Home on the Market
Having your home on the market at all times is one of the best ways to make money in the property market. You never know when someone is going to come along and make you an offer you can’t refuse. If your home is not on the market, you are missing out on potential buyers and offers.
While this is risky and means you will need to quickly shop around for a new home; however if your own home does sell, it can be very rewarding. You may even find that you sell your home for more than its market value. Of course, you will also need to arrange various things such as legal paperwork and a removals company, but considering the amount of profit you could make, the risk may be worthwhile.
House flipping is an accessible form of income generation from the property market for those with a little disposable income, but if you have a little more money, you may be able to create a regular stream of reliable income through becoming a landlord.
At the end of the mortgage term, the buyer can refinance or pay off the mortgage in full. This means there is little in the way of ongoing cost associating with buying a rental property, past a significant deposit at the start. As such, you can balance the books of property letting a little easier.
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